On June 8, 2015, the Supreme Court of the United States granted certiorari in Tyson Foods, Inc. v. Bouaphakeo, No. 14-1146, 2015 WL 1278593, to resolve Tyson’s challenge to a multimillion-dollar judgment awarded to a class of meat- processing employees who claimed insufficient pay. The decision, expected in late 2015 or early 2016, will address a court’s ability to certify a class based on what has been described as a “trial by formula” – essentially limiting the need to produce evidence on a class-wide basis, and instead allowing extrapolated proof from a sample of class members. Without question, the case presents important issues on the difficult risk-versus-reward decisions that class action lawyers and their clients face on a regular basis. In fact, as much as any decision in the last few years, the case could help clarify a defendant’s ability to move to strike class allegations, bifurcate class and merits discovery, and generally dispute class certification – all common albeit sometimes expensive weapons in class action defendants’ arsenals.
The parties’ arguments and case background provide an interesting backdrop for the expected decision.
The Arguments Before the Court
According to Tyson’s briefs, the Eighth Circuit’s decision intensifies two circuit splits and conflicts with Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541, 2561 (2011), and Comcast v. Behrend, 133 S. Ct. 1426 (2013), which limited a plaintiff’s ability to establish classwide liability and damages. See Brief for Petitioner at 2-4, 2015 WL 1285369 (No. 14-1146). Specifically, Tyson raised the following two questions in its March petition for a writ of certiorari:
- Whether differences among individual class members may be ignored and a class action certified under Federal Rule of Civil Procedure 23(b)(3), or a collective action certified under the Fair Labor Standards Act (FLSA), where liability and damages will be determined with statistical techniques that presume all class members are identical to the average observed in a sample; and
- Whether a class action may be certified or maintained under Rule 23(b)(3), or a collective action certified or maintained under the FLSA, when the class contains hundreds of members who were not injured and have no legal right to any damages.
Regarding the first question, Tyson argued that the “Second, Fourth, Fifth, Seventh, and Ninth Circuits have properly held that no class may be certified where plaintiffs seek to obtain an aggregate damages award for the class by extrapolating from a fictional ‘average’ class member” while the Eighth and Tenth Circuits “recently affirmed class certification where plaintiffs obtained an aggregate damages award by extrapolating from a sample of class members who had varying degrees of injuries.” Id at 3. On the second question, Tyson argued that the Second, Ninth, and D.C. Circuits have “held that to obtain class certification, plaintiffs must be able to show injury to all class members.” Id. In contrast, like the Eighth Circuit in its decision below, the Third, Seventh, and Tenth Circuits allow plaintiffs to “bring damages claims on behalf of individuals who were not injured and thus would have no viable individual claim for damages.” Id at 3-4.
In response, lawyers for Peg Bouaphakeo and her fellow named plaintiffs argued that without creating any circuit split, courts have successfully implemented representative proof and certified classes that contain potentially uninjured members, and that Tyson waived the right to appeal these issues. See Brief for Respondent at 2-4, 2015 WL 1951858 (No. 14-1146). The Plaintiffs also highlighted that “most of the cases cited [by Tyson] did not concern wage/hour claims at all [and] all of the cases on which Tyson relies involved much greater variation – both in degree and in kind – among claims of class members than is present here.” Id. at 11. Finally, on reply, Tyson highlighted the seven amicus briefs filed in support of its position and reiterated the “lack of clarity in the law that has permitted plaintiffs to obtain certification of classes with uninjured members and to use extrapolation and averaging to elide significant differences among class members.” Reply at 2, 2015 WL 2251177 (No. 14-1146).
The Case Background and Decisions the Court Will Consider
The named plaintiffs represent a class of employees at a Tyson meat-processing facility in Iowa. Claiming Tyson failed to pay overtime for donning (putting on) and doffing (taking off) protective equipment and clothing, they sued in 2007 under the FLSA and parallel state law. Notably, Tyson did not record the actual time it took any employees to perform these tasks, and the equipment and clothing used, and the time it takes to put on, take off, and transport the items, varies by individual employees depending on their role.
Following the Supreme Court’s decision in Wal-Mart Stores, Inc. v. Dukes, Tyson moved to decertify the class. The plaintiffs opposed, arguing that they could establish their case using expert testimony based on the average donning and doffing time for a relatively small sample of several hundred of the defendant’s employees. The district court denied the motion to decertify, notwithstanding notable variation – and perhaps a lack of quality control with respect to the selection process – of the sample of employees, who spent various amounts of time performing the allegedly uncompensated activities. During a nine-day trial, the district court then allowed plaintiffs to prove liability and damages, in part, by using expert evidence that allegedly demonstrated the amount of time an “average employee” was uncompensated. The jury returned a verdict for the class, with a final judgment totaling over $5 million.
On appeal, a divided panel of the Eighth Circuit affirmed the trial court’s decision, holding that the plaintiffs could use statistical inference to prove liability and damages, and that individualized damages did not preclude class certification. See Bouaphakeo v. Tyson Foods, Inc., 765 F.3d 791 (8th Cir. 2014). The dissent emphasized the substantial factual differences among individual employees, “including significant numbers of the putative classes suffering no injury and members of the entire classes suffering wide variations in damages.” Id at 805.
While the anticipated decision is difficult to predict with any certainty, there is hope that this case will provide practitioners and their clients with clarity on whether, when, and how to defeat class certification where a plaintiffs’ counsel attempts to extrapolate evidence from one subset of plaintiffs and apply it to the class as a whole. Even assuming the decision provides an advantage for defendants or discourages the filing of certain class actions, however, only time will tell how far the decision will reach. The Supreme Court may limit the ruling to the facts of the case, which are unique in that the class allegedly contains hundreds of members who, absent the class certification, were not injured and without a right to damages. In any event, the case deserves the attention it has received, especially from any defendant in high-stakes litigation, where the assessment of risk and crafting of strategy for challenges to class certification are as recurring as they are critical.